New York-based GTIS Partners, a global real estate investment firm, has closed its GTIS Brazil Real Estate Fund II LP, after raising a total of $810 million from institutional investors.
The firm, which was started in 2005, has raised roughly $2.3 billion of equity over its lifetime.
Monies raised in this fund were from many of the same institutions that participated in GTIS’ first dedicated Brazil offering—that fund raised $510 million from 2008 to 2009. Brazil is heavily reliant on foreign direct investment. The country saw its Gross Domestic Product growth rate slow in 2011—down to 2.8 percent from 7.5 percent the previous year, according to estimates from the CIA World Factbook.
GTIS president and founder Tom Shapiro told The Commercial Observer that, despite the slowdown, Brazil’s economy is still growing. As a result, the firm has simply shifted its areas of focus.
“Brazil has been on a tear of economic growth,” said Mr. Shapiro, who was flying out to the country in several hours. “And it certainly hasn’t stopped growing—projections this year are about 3 percent GDP growth. So what I would say is that we still see very compelling real estate opportunities since Brazil has been chronically undersupplied in most product types.”
GTIS has been doing less residential, Mr. Shapiro said, and more warehouse and logistics. In fact the last fund was about 50 percent residential, he explained, and this one will be “dramatically less than that.”
“We’ve invested approximately $1 billion of equity over the last few years,” he added. “But what we do today is very different than what we did before.”
Geographically, this latest fund will target Rio and São Paulo, especially in the office sectors.
As for the institutional investors, Mr. Shapiro said that they are largely pension plans, followed by insurance companies and sovereign funds.
It should also be noted that, despite the slowdown in GDP growth, some looming sporting events are making investors bullish on Brazil’s commercial real estate market. The World Cup arrives in 2014 and the Summer Olympics not long after, in 2016.